Bad Online Merchandising Is Hurting Your Sales
Merchandising is just as important online as it is offline. Read these 7 tips to improve your online presence, assortment, image, and sales.
Merchandising is the science of presenting a product in such a way that it will maximize sales. For example:
- Consumer goods firms fight over shelf space in their respective sections
- Luxury brands develop elaborate merchandising planograms
- Sales staff need to master the selling points of dozens of cosmetic products
- Companies conduct nation-wide price checks to see how they compare to their competitors
If you are a brand or a manufacturer, merchandising is already a component of your marketing and sales strategy.
Above are all examples of offline merchandising. When it comes to merchandising their products online, the performance of many brands is sub-par. To say the least.
Some websites botch the presentation of your products:
Key products are out of stock at some key retailers:
The products are assorted on lousy websites (who use terrible pack shots):
Some retailers order too many units and end up applying brand-damaging discounts:
Merchandising products online is not complicated
At BlueBoard, we are confronted with this merchandising freak show every day. It’s all the more surprising that many brands spend big money to keep an impeccable image in stores.
Terrible merchandising is just as bad online as it is offline. It reduces sales and damages brands in the long run. The good news is: merchandising works exactly the same for e-commerce!
Some brands are taking the matter seriously. We work with some of them to cut back on damaging practices and help them monitor the situation better. Here is our advice on how to improve your online merchandising. BlueBoard is a powerful e-commerce software that monitors your online distribution in real-time. This advice should work whether you use BlueBoard, another e-commerce intelligence solution, or no tool at all.
1) Pick retailers that will enhance your brand
The first element of merchandising is picking the places where your products should be sold. For many consumer goods brands, it’s quite simple: at as many places as possible! More elitist brands like some health and beauty, luxury and garments brands may want to only be assorted on more exclusive websites.
This is the fundamental of a selective distribution strategy. You should try and be associated with other brands that share your values of luxury/quality/reliability etc. Most brands already have a selective distribution policy that applies to their offline distribution. Often they only have to transpose it to their e-commerce distribution!
When a manufacturer relies on a distributor, they usually establish a selective distribution agreement. This document specifies the type of retailers that the distributor should target. Always include an e-commerce section in the distribution agreement. There you can specify the criteria for an e-commerce website to qualify as a potential retailer.
A good example of a clearly defined selective distribution policy is GoPro. GoPro has precise demands for its retailers, both online and offline. You may have noticed that GoPro products often have dedicated endcaps and a fully branded section.
On some websites, GoPro (either directly or via its distributors) obtains a similar preferential treatment with a dedicated subsite. These specific modules allow for a better presentation of the product range and their respective characteristics. Regarding merchandising, this is infinitely better than to have the products’ thumbnails drowned within those of the competition.
Not every brand has the power of GoPro though, but this illustrates how it is possible to transcribe good merchandising practices online. Find out How To Choose Online Retailers For Your E-Commerce Distribution.
2) Control and enforce your selective distribution strategy
Once you know which retailers should distribute which products, you may want to answer a few questions:
- Are my products actually assorted at these retailers?
- Do these retailers have enough stock?
- Are there other retailers selling some of my products?
There is a low-tech way to find answers:
- List your retailers,
- Search your products on their websites,
- Bookmark all product pages,
- Repeat for all retailers,
- Google your products (think to look up your SKUs and EANs besides the plain product name),
- Add the new retailers you find to your initial list,
- Open all your bookmarks once in a while.
Obviously, this is quite tiresome, especially if you have 10+ products at 10+ retailers (= 100+ potential product pages).
If your brand has more than a handful of products, you may want to switch to a professional e-commerce monitoring platform like BlueBoard.
BlueBoard automatically looks up your products on hundreds of websites. The human judgment confirms the hits and a crawler updates the products data every two hours. This allows us to automate the production of reports like the BlueBoard Report.
The BlueBoard Report gives you a bird’s eye view of the distribution of key products at key retailers. Brands use it to visualize their assortment, fix distribution issues and identify distribution opportunities. BlueBoard can generate it automatically and email it every week (or every day if you’re really tense!).
3) Monitor key products at key retailers several times a day
You are probably familiar with the 80/20 Pareto Principle: a minority of your retailers generate a majority of your revenue. Similarly, a minority of your products represent a majority of your sales.
For these specific products at these particular retailers, your monitoring needs to be on steroids. You’ll want to watch for any signs of a depleted inventory. Some product managers and salespeople even have a tab that they refresh several times a day.
BlueBoard helps in those situations. Our robots update the information every two hours and can notify you whenever something happens with fully customizable email alerts.
4) Maintain your brand throughout the web
It is not uncommon for brands to provide their retailers with merchandising guidelines. The same is true for online merchandising. Brands must control the appearance of their products wherever they are sold. Especially on third-party websites. Official retailers are often provided with brand-approved pack shots, product names, product descriptions, etc.
Beyond image consideration, it is also a brand’s responsibility to make sure that third-party retailers are not advertising erroneous (or straight up illegal) claims.
The BlueBoard Product Page feature helps with that. It displays all the critical components of your retailers’ product pages to identify content issues.
If the tool you are using does not have a similar feature, you can try some workarounds. The basic way is to repeat the steps on Tip 2), and to check the product page contents. Google Image will not work well for product images because it will skip similar-looking visuals. Google Shopping is a better option, albeit not perfect. Try different search terms (Product names in different languages, EANs, SKUs).
5) Don’t miss any review
Even if one single retailer (i.e.Amazon ) concentrates a vast majority of your sales and gathers most reviews, you still need to read (and deal with) every review on every site. Some e-shoppers will check several websites before they actually buy. If a terrible review slipped through the net on a website that you do not monitor, you might miss some sales.
In itself, reading a lot of reviews is not very time-consuming. What’s time-consuming is hunting them down. BlueBoard’s customizable Email Alerts can notify you of all new reviews on the sites that you monitor.
How you can take action depends on the website where the review was posted. Whether it is good or bad, you may want to respond or have it removed (if it’s dishonest).
6) Avoid brand-damaging pricing
In some countries, it is strictly forbidden for suppliers to impose the price charged to consumers to the retailers. BlueBoard will never encourage brands to break the law. Know your local legislation (or read EU Competition Rules here).
Pricing is an element of merchandising. Beyond the direct impact on margins and sales, pricing has a tremendous impact on brand perception. No brand likes to see its products discounted by 50%. You work hard to establish a product value in line with your MSRPs, and these discounts undermine your efforts.
BlueBoard has a lot of price tracking features, but it is of your resort to understand what led a retailer to drop its prices. Did the product underperform on their website? Did they order too many units? Does this retailer have a history of erratic pricing?
One of these tools is the Retailer Report. For a given retailer, it analyzes its track record in stock-keeping, pricing, and reviews. This is the Pricing Report, a history of price gaps at this retailer:
- green: price is above 98% of the MSRP
- yellow: within 98% and 90%
- red: within 90% and 60%
- black: below 60%
If you see that the situation is degrading, it might be time to give this retailer a phone call.
7) See how you compare to the competition
Do some of your products have a clearly identified rival from another brand? Then you definitely need to know how they are doing respectively. Here’s a list of questions you may want to look into:
- Which retailers list both products? Only one of them?
- Which product has the highest availability rate?
- Who is getting the best reviews?
- Who can best maintain their prices over time?
Monitoring competition is a source of emulation and inspiration!
Online merchandising is as vital as offline merchandising. Also, its core principles are the same. It just requires a different approach and different tools.
If your product range is narrow, you can manage with no specific tools. But like for offline merchandising, you will not be able to manually inspect dozens of retailers every day or even every week. This is where e-commerce intelligence platforms come into play.
BlueBoard monitors thousands of products at 1200+ retailers all over the world. We make sure you do not miss important events. We help you make the best e-commerce decisions. Get in touch with our sales team if you’d like to know more!